Imagine if the entire distribution network supporting Canada’s $9 billion beer industry suddenly disappeared. No more going to the corner store, food market, or nearby government outlet to get your favourite beer. The only solution you have is to drive directly to small-batch craft brewers, where you can only hope that their beer has stayed fresh and that they haven’t run out.
This is the potential chaos confronting Canada’s soon-to-be-legal cannabis market, estimated to be worth $6-8 billion annually by 2020. The reason is simple, while growers worry about increasing their output and governments haggle about how legal cannabis will be sold, a national distribution channel to accumulate, blend, brand, package, and distribute cannabis products and accessories simply doesn’t exist yet. So when all those eager shoppers start clamouring for cannabis products starting next Canada Day, chances are that many of them will encounter goods of inconsistent quality that are in short supply — or even not available at all in rural areas.
While the use of marijuana for medicinal purposes has been legalized since 2001 in Canada, weed for recreational use is set to become legal on July 1st, 2018 (Canada Day).
Now imagine the profit opportunity for a company that solves this distribution issue when cannabis becomes legal in Canada in the middle of next year. To put it in beer terms, imagine you had invested in the company that has amassed and blended beer to a consistent quality standard and volume, branded it, and arranged to distribute it to beer stores and grocers nationwide when prohibition finally ended.
This is precisely the cannabis distribution solution that has been devised by North Road Ventures, a wholly-owned subsidiary of Liberty Leaf Holdings (CSE:LIB – $0.16 CAD & OTC:LIBFF – $0.13 USD & Frankfurt:HN3P – €0.09).
Based in the greater Vancouver, BC area, North Road Ventures is poised to legally distribute cultivated and manufactured cannabis products to licensed retailers, with the goal of expanding into the recreational market.
To make this happen, North Road has an application pending with Health Canada for an Access to Cannabis for Medical Purposes Regulations (ACMPR) license amendment for the sale/distribution of dried cannabis, cannabis oils and other related products containing THC and CBD. For its first year of licensed operations, North Road has specified a secure vault capacity under its license request that would allow the company to legally store up to $6,250,000 worth in cannabis products at any one time. North Road is a distribution company, and if it turns over its vault capacity just once a month, this firm could generate annual revenues of $75,000,000.
Conquering the Distribution Channel
Liberty Leaf Holdings is a Canadian public Company whose focus is to build and support a diversified portfolio of cannabis related businesses. Also based in Vancouver, Liberty Leaf’s legal cannabis portfolio is growing to embrace cultivation, value-added CBD/THC products, biotech research, and supply chain products.
“Without a proper national distribution system, Canada’s legal cannabis rollout could result in serious product shortages for consumers”, warned Liberty Leaf’s President and CEO Will Rascan, “Worse yet, if consumers can’t get access to legal cannabis products when the law says they can, the black market will fill the gap. That is exactly opposite to what the federal government hopes to achieve with legalization, and something that the North Road distribution model is designed to avoid. That is why it has such profit potential”.
The North Road cannabis distribution model brings the same end-to-end discipline and supply chain mastery used by established brands in the food and beer/wine/spirits industries. Under this model, North Road will interface with artisan cannabis growers across Canada. The company will then contract sufficient supply to ensure that its branded cannabis products (including white label products for third parties) can be tested, blended and manufactured to consistent qualities and quantities to meet market needs. (According to the Parliamentary Budget Office, that demand will hit 655,000 kilos of dried cannabis in the first year of legalization alone.)
That’s just the beginning. North Road will also handle the other side of product distribution, ensuring that all licensed retailers (government, pharmacies, and stores of all sizes) receive the cannabis products they need when required, at reliable quality levels and predictable prices – all supported by a robust online ordering platform.
“We will be a recognized full-service Canadian cannabis distributor, providing end-to-end, full cycle wholesale delivery to the one-stop retail storefront customer base”, said Rascan. He continued, “As an approved producer under the ACMPR, North Road will also apply for an import license, to ensure that we always have a fully-tested and warranted cannabis flower/oil supply. This is important, because the predicted Canadian-grown supply of cannabis is hundreds of thousands of kilos below demand”.
Moreover, Liberty Leaf plans to export medicinal Canadian cannabis products to other countries where it has been legalized. It is worth noting that nearly twenty countries worldwide have legalized cannabis possession and consumption to some degree (primarily for medical purposes), including Switzerland, Croatia, Czech Republic, Colombia, Jamaica, Italy, Spain and Uruguay, to name a few. Also Germany and Australia have recently passed legislation authorizing the use of cannabis for medical use.
In closing Mr. Rascan mentioned, “There is tremendous revenue growth and profit potential in the Canadian cannabis market. Through North Road Ventures, our Company will soon have the distribution model in place to make the business case work”.
For investors seeking to build a position in the emerging Canadian cannabis market, choosing a well-diversified enterprise like Liberty Leaf is a logical investment. In addition to North Road and its comprehensive distribution model, the Company is seeking to acquire similarly high-value properties in other areas of cannabis production and marketing. Liberty Leaf’s goal is to quickly become an establish player in Canada’s legal cannabis market. Learn more at www.libleaf.com.
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